Fears that the recovery in the manufacturing sector is starting to lose steam have been fuelled by lacklustre industrial growth figures.

The Office for National Statistics (ONS) said manufacturing output rose by 0.1 per cet between December and January, a much weaker performance than the 1 per cent jump reported for the previous month.

In industrial output, which includes the mining and quarrying sectors, production fell by 0.4 per cent on the prior month.

David Kern, chief economist at the British Chambers of Commerce, said the weaker-than-expected figures were a reminder of the need for measures in this month’s Budget to boost the economic recovery.

He added: “Output has been virtually stagnant and although the economy has likely returned to positive growth in the first quarter, any improvement will be very weak.

“But we mustn’t be too gloomy. A period of sluggish growth is to be expected at a time when tough austerity measures are being implemented, and the eurozone’s problems create challenges for our exporters.”

However, Richard Halstead, Midlands Region Director at EEF, the manufacturers’ organisation, was more optimistic, adding: “Index of Production figures for January 2012 support leading indicators in recent weeks that suggest manufacturing growth has continued from December into 2012, following a difficult period at the start of the last quarter of 2011.

“This fits with EEF’s own Business Trends Survey that shows growth in the sector in the first quarter of this year and some cautious optimism for the year ahead. Even as the Eurozone debt crisis drags on holding, back exports to some traditional markets, improving prospects in the US and continued opportunities in emerging markets are increasingly driving growth for manufacturers.”